Reddit, the popular online platform known for its diverse content including cute cat pictures, investment advice, niche hobby discussions, celebrity interviews, edgy memes, and wholesome memes, has been a hub for internet discussions since 2005. The site boasts approximately 57 million daily active users who contribute and consume news, memes, questions, and even stock tips that have the potential to impact markets.
In late 2021, Reddit filed for an initial public offering (IPO) and is now seeking to generate profits for the first time. To achieve this, the company has introduced charges for access to its application programming interface (API). However, this move has resulted in the shutdown of beloved third-party Reddit apps like Apollo, causing an outcry among the website’s community of volunteer moderators. These moderators often rely on third-party apps to manage the site’s 100,000+ discussion communities, known as subreddits.
Despite extensive protests, with many moderators temporarily making their communities private, the API pricing changes went into effect on July 1 as planned. Most communities have since reopened under pressure from Reddit administrators. However, tensions remain high, and some users believe that unless Reddit rebuilds trust, its most passionate users will seek alternative platforms.
According to David DeWald, a moderator of the r/Arcade1up subreddit and a community manager for telecommunications company Ciena, “Reddit is nothing without those communities. They need us far more than we need them.”
The journey of Reddit began when co-founders Alexis Ohanian and Steve Huffman were seniors at the University of Virginia. They seized the opportunity to build “the front page of the Internet” after meeting Y Combinator founder Paul Graham. After receiving a modest investment of $12,000 in 2005 from Y Combinator, Reddit became part of its first group of companies.
Initially, user activity was low, with the founders creating the illusion of activity by posting under various invented usernames. However, Reddit gained traction and was eventually acquired by Condé Nast for $10 million in just 16 months. The co-founders stepped away from day-to-day operations by 2010, but Reddit’s traffic continued to grow. In 2011, the company became an independent entity under Condé Nast’s owner, Advance Publications.
While Reddit’s specific communities offered ideal advertising targeting, the platform faced challenges due to its permissive attitude towards controversial content. Debra Aho Williamson, principal analyst at Insider Intelligence, acknowledged that “Reddit is kind of a perfect environment for advertising because the communities can get so specific and so passionate about whatever it is that they’re discussing. But Reddit has had challenges over the years with hate speech and other things that are maybe not brand-friendly.”
Ohanian returned to Reddit as executive chairman in 2014, aiming to address the platform’s toxic subcultures. A new anti-harassment policy implemented in 2015 led to the banning of some hateful communities. However, it wasn’t until Ohanian resigned from the board in 2020, pushing for a Black replacement, that Reddit took further action. Thousands of hate communities were subsequently banned, including r/The_Donald, r/ChapoTrapHouse, and r/gendercritical.
During the COVID-19 pandemic, Reddit experienced increased engagement as people spent more time online. In early 2021, Reddit gained attention when users of the r/wallstreetbets subreddit coordinated a short squeeze on GameStop, leading to subsequent “meme stocks” like AMC dominating headlines. Riding this wave, Reddit filed for an IPO at the end of the year.
Reddit’s focus has now shifted towards profitability. As companies like OpenAI and Google scrape the internet to train language models, Reddit plans to charge them for accessing its data. However, this pricing change affects not just tech giants but also popular third-party apps and moderator tools that rely on API access, which was previously free. These third-party apps, such as Apollo, riF is Fun, Reddplanet, and Sync, often offer sleeker user interfaces and more features than Reddit’s official app.
The pricing changes sparked significant backlash, particularly among blind users who heavily relied on accessibility features offered by third-party apps. Over 8,000 subreddits participated in a sitewide blackout to protest the changes, some remaining closed for longer periods. The r/pics and r/gifs subreddits, for instance, limited their content exclusively to comedian John Oliver. The moderators of the popular Ask Me Anything subreddit announced they would no longer organize interviews with celebrities or high-profile figures, a move that has traditionally driven engagement.
Despite some communities reopening, several moderators expressed frustration with Reddit’s response. Huffman, in an interview with NBC News, compared moderators to “landed gentry” and claimed their control over communities was undemocratic. As Reddit heads towards its IPO, the tech industry is closely observing how these tensions will shape the platform’s future.
According to DeWald, Reddit must work with moderators and app developers to find a solution that benefits everyone, including Reddit itself, as the platform relies heavily on its passionate user base.